Stocks under pressure amid worries about US banks and China: Stock market news | August 8, 2023

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Stocks remained under pressure but somewhat recovered from steeper losses in afternoon trading on Tuesday after a warning about US bank health and surprisingly weak Chinese trade data sent shivers through markets.

The Dow Jones Industrial Average (^DJI) dropped about 1%, or 360 points. Meanwhile, the S&P 500 (^GSPC) was down almost 1.1%, and the tech-heavy Nasdaq Composite (^IXIC) sank around 1.5%.

Worries about US banks were revived after Moody's downgraded 10 small and midsize institutions, which came with a warning it could lower credit ratings for some of the nation's biggest lenders. It flagged risks in their commercial real estate portfolios, a reminder that stresses in the sector persist after the banking crisis earlier this year.

In Europe, bank stocks tumbled after the Italian government said it will put a 40% windfall tax on lenders' profits, raising fears that other countries could do the same.

Optimism about stocks also took a hit Tuesday when data showed a slump in Chinese imports and exports in July that was far worse than expected. Demand is weak, dimming the prospects for a rebound in the world's second-biggest economy.

Those discouraging economic signs come as investors wait for the release of the July inflation report on Thursday, looking for a steer on whether the Federal Reserve will put its interest rate hikes on pause again.

Meanwhile, another batch of earnings reports is rolling in and could shed more light on how corporate America is faring. Results from UPS (UPS), Eli Lilly (LLY), Restaurant Brands (QSR), and Fox Corp (FOXA) are among the highlights.

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